MARKETS UPDATE (11:45 pm EST)
In last Sunday's blog I mentioned how Goldman Sachs had recently been talking down gold, and in fact, they predicted a "significant decline" in gold for 2014. Several financial analysts that I follow seem to think it is very likely that big financial players such as Goldman Sachs, J.P. Morgan and others are presently attempting to manipulate gold prices down to a strong support zone that exists around $1000. We can speculate that their strategy is to accumulate short positions now, push the price down to that support for a good profit and then reverse and go long at a discounted price after having shaken out the 'little guy" investor (except those like us who may be on to their game). There has been clear evidence of gold price manipulation over the last two months by some "mysterious" seller(s) with a lot of money to throw around. On three separate occasions (Oct.1, Oct. 9, Nov. 20) very large sell orders for gold (i.e. 800,000 ounces) were placed on Comex in the early morning hours just before the opening of the New York markets. This had the effect of pushing prices down significantly each time (when technical signals were indicating a likely upside breakout). Big financial institutions like Goldman Sachs also have considerable influence on (if not direct control of) many mainstream media outlets, so their recent "thumbs down" for gold can certainly contribute to fear in the market and help propel prices lower. If all this is true, it lines up well with the current technical and cycle picture for gold which indicates further downside in prices that could approach $1000 - an area that should hold and become a launching point for a new major trend upwards.
I entered short positions in gold last week but stayed out of silver as its short-term technical indicators were looking a little more bullish than those for gold. We may see silver rise a bit more early this week to give us a better entry point to go short, but we don't want to see prices break and close above the $21- $22 area. Presently holding a short position in gold but out of silver.
The broad stock market made new record highs on Friday but is still looking very overbought and toppy. If there is going to be even a small correction in this market it needs to start now; otherwise the exuberant optimism of the holidays may drive a strong rally straight into Christmas with minimal dips along the way. I am now looking to buy any corrections that approach and stay above the 15,850-15,900 level in the DOW. Still on the sidelines here but looking to go long.
The cycle picture for crude oil is still unclear, but crude did make a significant new bottom last week (just below $92 on Wednesday) in a strong reversal zone and prices are now rising. Directional momentum, however, continues to be 100% bearish, so I'm not sure how far this rally can go before turning back down. If the rally continues into Christmas and momentum remains bearish, I will be looking to sell it short. For now, I am remaining on the sidelines of crude oil until the cycle pattern is more clearly established.
In last Sunday's blog I mentioned how Goldman Sachs had recently been talking down gold, and in fact, they predicted a "significant decline" in gold for 2014. Several financial analysts that I follow seem to think it is very likely that big financial players such as Goldman Sachs, J.P. Morgan and others are presently attempting to manipulate gold prices down to a strong support zone that exists around $1000. We can speculate that their strategy is to accumulate short positions now, push the price down to that support for a good profit and then reverse and go long at a discounted price after having shaken out the 'little guy" investor (except those like us who may be on to their game). There has been clear evidence of gold price manipulation over the last two months by some "mysterious" seller(s) with a lot of money to throw around. On three separate occasions (Oct.1, Oct. 9, Nov. 20) very large sell orders for gold (i.e. 800,000 ounces) were placed on Comex in the early morning hours just before the opening of the New York markets. This had the effect of pushing prices down significantly each time (when technical signals were indicating a likely upside breakout). Big financial institutions like Goldman Sachs also have considerable influence on (if not direct control of) many mainstream media outlets, so their recent "thumbs down" for gold can certainly contribute to fear in the market and help propel prices lower. If all this is true, it lines up well with the current technical and cycle picture for gold which indicates further downside in prices that could approach $1000 - an area that should hold and become a launching point for a new major trend upwards.
I entered short positions in gold last week but stayed out of silver as its short-term technical indicators were looking a little more bullish than those for gold. We may see silver rise a bit more early this week to give us a better entry point to go short, but we don't want to see prices break and close above the $21- $22 area. Presently holding a short position in gold but out of silver.
The broad stock market made new record highs on Friday but is still looking very overbought and toppy. If there is going to be even a small correction in this market it needs to start now; otherwise the exuberant optimism of the holidays may drive a strong rally straight into Christmas with minimal dips along the way. I am now looking to buy any corrections that approach and stay above the 15,850-15,900 level in the DOW. Still on the sidelines here but looking to go long.
The cycle picture for crude oil is still unclear, but crude did make a significant new bottom last week (just below $92 on Wednesday) in a strong reversal zone and prices are now rising. Directional momentum, however, continues to be 100% bearish, so I'm not sure how far this rally can go before turning back down. If the rally continues into Christmas and momentum remains bearish, I will be looking to sell it short. For now, I am remaining on the sidelines of crude oil until the cycle pattern is more clearly established.
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